My Polish neighbor recently gave me an interesting tip: stay pessimistic about the Polish currency. The reason was the current government and the risks from the Ukraine crisis. But as someone who deals with forex, I wanted to check that myself – and lo and behold, the matter is more complicated than expected.

The euro-zloty currency pair fascinates me because it shows how two closely intertwined economies play against each other. Poland has been in the EU since 2004 but has not adopted the euro. That means: we can still trade the PLN against the EUR. Currently (May 2026), we are around 4.27 PLN per euro – and at first glance, that’s boring. But the chart tells a different story.

The last three years have been interesting: after the Ukraine war, the euro initially rose significantly. But then – and this is the exciting part – the euro-zloty rate fell again. Since March 2025, there has been a small counter-movement. This could signal a trend reversal. Several times, the rate bounced off a significant low. That smells like a setup.

What actually drives the pair? The usual suspects: inflation, interest rates, debt, politics, growth, and geopolitical risks. Regarding inflation, the Eurozone is ahead – 1.7% forecast for 2026 versus 2.8% in Poland. But when it comes to interest rates, the picture changes: Poland is at 4.75%, while the EU is only at 2.0%. Higher interest rates attract capital, which should support the PLN.

Poland’s GDP growth is also better: 3.5% expected versus only 1% in the Eurozone. The unemployment rate is significantly lower at 3.1% compared to 6.2% in the Eurozone. All these factors favor an appreciation of the złoty. On the other hand: Poland’s national debt has recently risen sharply, which could slow things down. And the war in the east remains a structural risk.

Analysts are divided. Some expect 4.20 EUR/PLN, others see 4.44. Erste Group forecasts 4.30. My gut feeling: the euro-zloty pair is moving sideways, with a slight upward pressure. The factors balance each other out – what supports the EUR often also helps the PLN, and vice versa.

For me as a trader, that means: go long at lows, exit at the next high – or set a long-term bet on a trend reversal. The daily ranges are not particularly large, so relatively relaxed trading. For a carry trade strategy, the pair could also be interesting because the interest rate difference between the countries is quite significant.

My Polish neighbor was not entirely wrong with his skepticism. But pessimistic? I wouldn’t go that far. The złoty has appreciated significantly in recent months. With higher interest rates, solid growth, and low unemployment, there are good reasons for further appreciation. But higher inflation and geopolitical risks are real brakes.

My conclusion: the euro-zloty pair is not a spectacular trading vehicle, but it offers interesting setups for patient traders. And it’s a good conversation topic with Polish friends – if you know what you’re talking about.